Thursday, 5 January 2012

Disqualify directors who ignore well-being, say Lib Dems

Company directors should be disqualified for serious cases of failing to protect their employees’ well-being, according to a new policy paper from the Liberal Democrats.

Presented at the party’s annual conference in Septmber 2011, the paper details the Lib Dems’ proposals to improve people’s quality of life and well-being. Several proposals concern the workplace, with the party recognising that employers should take action to make their workplaces better environments in which to work, and measure this through employee satisfaction.

It suggests, for example, that employers should implement measures that allow staff to gain a sense of control over how they carry out the task they are doing, and increase flexible-working arrangements. By 2014, it wants to see the 9000, or so largest organisations – which, together, employ half of the UK workforce – report on employee satisfaction and the extent of flexible working.

It also believes that a new National Institute for Well-being should be set up and tasked with creating a way to report this information in an accessible way, so that employers will be encouraged to use it to improve their well-being performance.

Although the Lib Dems argue that these policies should be implemented through cultural change rather than compulsion, the party does believe that the existing power to disqualify an individual from being a company director for financial impropriety should be extended to serious failure to protect employees’ well-being.

According to an HSE-commissioned report published in 2007 on the effectiveness of the Company Directors Disqualification Act 1986, company directors are almost 300 times more likely to be disqualified by a court from acting as a director for financial reasons than for breaching health and safety rules. Researchers from the University of Warwick found that, up to 2005, just ten directors had been disqualified for health and safety breaches, while some 1500 were disqualified for insolvency, or other financial reasons over the same period.

In a speech at the Liberal Democrat conference, the party’s deputy leader, Simon Hughes, said “a new attitude to work could make the biggest change” to quality of life and well-being.

He said: “In the UK, we have one of the most unequal distributions of work in the developed world. Almost four out of every ten men and nearly one out of every eight women work more than 45 hours a week – more than twice as many as our western European neighbours.

“This is a particular problem in the financial sector and at the top of large businesses, where many people work extremely long hours accumulating huge amounts of money, which they barely have the time to spend. At the same time, we also have one of the highest rates of people who work less than 20 hours a week.”

Calling for a radical redistribution of work, he added: “Overwork has hugely damaging consequences for families, relationships and the quality of personal and community life. Lack of work is one of the biggest causes of poverty and poor physical and mental health.”

He concluded: “If we really want to make a difference to quality of life in our country, we need also to tackle inequality of wealth by tackling inequality of work.”

Despite calls for the Institute of Directors/HSE code of practice on directors’ duties to be made statutory, it remains voluntary.